About

"The reluctant Francophile..."

My husband Jack has always wanted to live in Paris and learn French. I thought it would be good for him to achieve his life time dream. Hence, we moved to Paris in 2008. My first year was difficult. I started "missives" to relieve some stress and chronicle my life so friends back in the US could read what I am experiencing. I currently write about my food and travel experiences, which is my passion.

It is definitely a challenge to live here, but each year it gets easier, and quite enjoyable, in large part because I value friendships over locale. I have a love/hate relationship with Paris as do most Parisians, mais La vie est belle (but life is good)!

Monday, February 7, 2011

General Banking in France -- Opening and maintaining an account

I can only speak from my own personal experiences of having worked in the banking/financial institution in the US for over 30 years and our French experiences of opening and maintaining a bank account. Along the way, I learned a few tips and tricks that I want to share and hopefully make your life a little easier.

Let me begin by saying that the customer paradigm of banking is significantly different when comparing the two. In the U.S. banks want your business and will pay for the privilege of having you as a customer. The reverse is true in France, the customer pays for the privilege of banking with them.

Opening an account (non-resident and resident status)

Non-resident or compte non-résident
Not all banks provide accounts for non-residents, but they do exist. Find an "International" branch. For example, the International branch for BNP Paribas is located in L'Opera. Call and make an appointment with one of the bankers, and let them know ahead of time you are from the U.S (yes most banks require you to make an appointment with a councilor rather than just walking in).

Your first meeting will be primarily to discuss banking options as well as what will be required from you. The most common account to open will be a checking account with a bank debit card, used extensively throughout Europe known as"Carte Bleu". After all the paperwork is done, you will need to have, in most cases:

Proof of identity. A passport, and in some cases a birth certificate.

Residency. A simple utility bill will work.

References. Obtain a letter from a financial institution in the US of your credit worthiness, or in other words a letter of recommendation. This can be sent via fax.

Collateral. A deposit otherwise known as a guarantee, sort of a dowry which must be maintained in a savings account to be used as collateral. Hence, the balance can never be brought down. Don't be surprised if the collateral is as high as 8,000€ or equivalent of about $10,500. This can be sent via wire transfer.

Fees. You will agree to pay a banking fee, regardless of the dowry. Remember, you're paying them for the privilege of using their bank.

Once they get the letter of recommendation and deposit, you will be mailed (locally) your checks. However, you will need to personally pick up your debit card, they will notify you when it's ready.

Resident bank account:
Resident bank accounts are typically for those who are coming to France to work, students, and/or carte-de-sejour (resident card) holders.

You will need to provide the following:

Proof of identity. Passport or if you are an EU citizen, an EU card, plus utility bill, and in some cases a birth certificate.

Proof of earnings or status. This usually means your work contract, proof of earnings, or a student card. NOTE: If you are retired, they may ask for proof that you can sustain yourself in France; hence, maintain a checking account in good standing by showing e.g., bank accounts from the U.S., or dividend checks etc. In some instances you may be requested to put a collateral in a savings account similar to a non-resident (see above).

Resident status. This is usually a "carte-de-sejour"similar to our "green-cards" in the U.S. For more information on obtaining a carte-de-sejour, see this site"Anglo-info".

References. Obtain a letter from a financial institution in the US of your credit worthiness, or in other words a letter of recommendation. This can be sent via fax.

NOTE: Banks are de-centralized; hence, you will need to go to your "branch" to do any specific transactions, other than using the ATMs. And, just because it's an "International" branch don't assume that all the tellers or bankers speak English. If you can't speak French, they will usually search for an English speaker.

Writing checks
Check writing and presenting is pretty much as in the U.S. However, there are a few things to keep in mind:

Numbers. You will need to learn numbers in the "written" form. Also remember that a comma (,) marks a fraction; hence, €5,25 is five euros and twenty-five centimes. Whereas, a period (.) marks the thousands; hence, €5.250,00 is five thousand, two-hundred-fifty euros.

Presenting checks. When presenting a check to a retailer or bank, you will need to provide an I.D., a passport works fine or a carte-de-sejour.

Bouncing checks. The French take bouncing checks very seriously and it is illegal to do so. The bank must report "insufficient" funds transaction(s) to France's national banking authority, Banque de France, which can impose an interdit bancairewhich forbids the account holder from using checks for five years. So, the French are very careful not to bounce checks.

Post-dated or open-dated checks. It is illegal to post-date or have no dates at all on checks.

Stale dated checks. Checks are good for one-year and 8 days.

Canceling checks. A check can only be canceled if it is lost, stolen or if there is a suspicion of fraud.

In France, it is very common to pay (recurring ) bills via your checking account. However, rather than writing a check, you can instruct your bank to transfer (virement), either one time or on a recurring basis, XYZ€ directly to e.g., your landlord's checking account. You will need to obtain their "RIB"(Relevé d'Identité Bancaire). A RIB contains the account number, bank code, and the sort code (this might seem strange to Americans who are told never to let anyone know their bank account number.... here they are passed around like confetti). In other cases (typically semi-regular bills), you will need to authorize this via a TIP (Titre Interbancaire de Paiement) which is the authorization to debit your account in the sum of whatever the bill is that time. Typically, it comes attached to the bottom of an invoice. The first time an invoice is received, sign it and enclose your RIB and return. The next invoice amount will automatically have all the bank information printed on the TIP and needs only to be signed, dated and mailed back. And of course there are many organizations where you can 'auto pay' (they automatically deduct the amount due directly from your bank account).

Although credit is becoming popular, for the most part France is a cash society. The carte-bleu cards or debit cards are used extensively throughout France and Europe. You simply present it and you enter your "pin" number and it is automatically deducted from your checking account.

A few tips and tricks for Americans

Using European ATM's with a US ATM card can be costly. Not only do most US banks charge you for using a foreign bank (about $5), but they usually charge at a higher exchange rate. However, some banks in the U.S. have reciprocal agreements with foreign banks; hence, using their ATM card will cost you nothing, but the current exchange rate at the time of withdrawal. For example, Bank of America has a reciprocal agreement with BNP. Hence, you can avoid unnecessary transaction fees. Plus if you normally wire transfer money to your account in a French bank, to have readily available cash-on-hand, you could just maintain a "cash" account with e.g., BofA, and withdraw as needed via ATM, thereby, mitigating any fees associated with wiring money to your French bank account. Trick is only wire transfer money to your French account when the dollar is strong, and use the French account to primarily pay bills and make credit card (euro) transaction.

US credit cards also charge for foreign exchange as well as a fee. Again, do some research, some credit card institutions do not charge extra, but will simply charge your purchase at the current rate of exchange. For example, Capital One does not charge a foreign surcharge fee and uses the current rate of exchange at the time the purchase is processed.

Always check your agreement, banks in France will nickle-and-dime you to death. You can save a few euros by knowing the cost for each transaction. If you do not need a euro based credit card (carte bleu) it is possible to get a free French checking account. But if you live in Europe you really should have a euro based credit card. At many places a credit card (with a chip) might be the only way to pay (e.g., the pay highways of France).

Again, this is just a general overview. There are lots of sites online which can give you more detailed information...

Please note:FATCA "The Foreign Account Tax Compliance Act" is changing how Americans bank in France and many French banks are hesitant to open bank accounts to Americans. I am not an expert on this subject, and would recommend you contact a professional tax consultant.

Note that US-baed American Express Platinum and Centurion cards are moving to fee-free international transactions sometime in March.

And post-dating checks is common here in France. I don't know about the legality, but people do it.

As for insufficient funds, I don't think it is an issue as long as it is corrected within a few days or so. It's happened a few times to me, and I have only seen a tiny fee. They didn't even contact me.

Thank you so much for the clear explanation of RIB, TIP, etc...the entire concept was so confusing for me and I could not for the like of me figure out how to fill out checks as I don't write in french numerals.

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Disclosure

Since I am retired, I am not aspiring to be the next "blogger" extraordinaire. I write solely for my edification and to entertain my friends. I do not accept gifts, cash or free meals from restaurants or businesses that I may review or mention in my blog. Nor do I make a pre-announcement that I am reviewing a restaurant. I also do not accept paid advertisement.

Interview with Michelle Pozon

Interview with Chef Aaron Isip

Brief summary of my food philsophy......

“It’s not how well you can cook, but how well you can execute…”

I'm a big "lover of food" having gone to the California Culinary in SF as a hobby, and when I retired I ran a cooking club which included cooking demos as well as bringing in other "cooks" and local Chefs to share family recipes and/or provide cooking demos. I have helped Chefs develop menus, took part in wine and food pairing events, wrote restaurant reviews, assisted in test kitchens developing recipes, and I've even catered a few weddings.

Although I favor Asian/ethnic cuisine over European cuisine, I love to eat all foods. My philosophy has always been, when you travel visit the country's markets. Markets provide a wealth of information about a culture and it's people. Make no mistakes, I think French cuisine can be very good, but to me it is not the "be-all-end-all."

NOTE: As we all know, restaurants can improve or deteriorate. I will try to update my restaurant reviews, if there are any significant changes.